TODAY'S TANTILLO TAKEAWAY -

Never take brand equity for granted. If you have a brand with a great long-term track record, don’t just throw it away in the face of short-term challenges (or even long-term changes in the industry). Remember, brand equity might be a challenge to maintain, but it is a lot harder to start from scratch.

SAVE THE DATE:

WEDNESDAY, NOVEMBER 18, 8-10AM

BRAND
FOR BREAKFAST

Make Your Business Healthy In Ninety Minutes

Marketing expert John Tantillo, PhD, a TV, radio and columnist
personality, delivers you Value for money in his latest acclaimed Power
Course and New York networking opportunity at top Manhattan restaurant
Etcetera Etcetera.
(Breakfast and Subscription Web Support Included)

You’ll Receive:

1) Actionable brand and marketing intelligence
2) Timely and specific brand guidance
3) Instruction on Tantillo’s NAV protocol
4) Tips on how to rapidly develop your Target Market
5) On-line and continuous lesson support
6) The chance to meet other like-minded professionals

SAVE THE DATE!
WEDNESDAY, NOVEMBER 18, 8-10AM

John Tantillo’s Winner and Loser of The Week:

Loser: Condé Nast

Folks, rather than beat the dead horses of the Letterman scandal and the failed Olympic bid (in my opinion, both have created long-term brand damage), this week I wanted to take a quick look at two clear business branding items. So without further ado:

The Winner

The winner this week has been a winner before. This time, I picked them because they remind us once again how a great brand constantly adapts to the market.

I’m talking about Wal-Mart and its operations in Mexico.

The recession’s been tough in America, but it’s been even worse in Mexico.

Wal-Mart de México is Latin America’s largest retailer, and recently it has shown us why. They have just reported a 12 percent increase in net income.

How did they do it in the worst recession since the 1930s? By remembering their Target Market.

In this case, Wal-Mart’s Target Market in Mexico are people who are living from one day to the next. They’re not prepared to buy in bulk like the typical Wal-Mart customer in the U.S. In fact, they’re not even prepared to buy large quantities, even with Wal-Mart’s deep discounts. This, folks, is what I mean when I say it’s all about your customer. For sales to increase, especially in a recession or when things aren’t going well, you must pay particular attention to what your customers really want and how they buy.

Wal-Mart did exactly this, and their response has been The Bodega Express. These are relatively small outlets that sell items in single-use quantities (cereal, milk, tortillas).

As a result of the concept’s success, seventy-three percent of the 270 new stores Wal-Mart is launching this year are Bodega Express outlets.

Wal-Mart took a page from Mexico’s successful street vendors in customizing its approach to the single-use consumer buying habits and diminishing purchasing power of the average Mexican.

Bottom line, this is another example of how great brands operate: they always have an ear to the ground and the willingness and energy to respond to changing market realities.

Loser

An opposite example and this week’s loser of the week is Condé Nast.

Frankly, I’m shocked by the news (the story broke today) that Condé Nast, one of the world’s most successful magazine companies, is going to be closing the seven-decade old institution Gourmet magazine.

Wow… what a bad decision.

This is not about shutting down a faded brand. This is about shutting down a brand with a devoted following. Gourmet has almost one million subscribers —at last count, many of whom have subscribed for years.

The purported reason for the decision? Declining advertising revenues.

Now, the Marketing Doctor is the last person to dispute the dramatic change in the media and advertising landscape, and there’s no question that Gourmet has faced a severe drop in ad pages, but there’s major brand equity at stake here. Not to mention… how can you justify throwing away a million subscribers?

What’s left me dumbfounded are the obvious options that they seem to have overlooked, like a smaller magazine, a less frequent magazine, a holiday-only magazine. How about a little imagination, Condé Nast?

While management is saying that they’ll still use the brand for broadcast and other purposes, the fact is that the magazine is the core of this brand. It provides the editorial content and credibility that is the backbone of the brand.

Content comes at a price, and that is the cost that management is cutting. A brand isn’t just a logo; it is a comprehensive thing that has real customers with real needs… I will bet my Borsalino that the geniuses who made this silly decision to stop publishing this great magazine (apparently McKinsey was brought in as the ax-dropping consultants) have no real idea about branding.

Let’s use my N.A.V. model to assess this decision.

N.A.V. stands for noun, adjective and verb. This is how the model works: the name of the brand is the noun. The adjective is the best description of the brand. The verb is the active promotion of the brand.

Whoever made this decision (i.e., our Ivy-League consultant friends) focused only on one third of the brand, the name Gourmet. (No surprise, then, that they plan on continuing to use the name for other endeavors —good luck with that.)

The problem is that they ignored the adjective element, which is the best description of the brand, and is directly dependent on the core features of the brand. In other words, you get rid of Gourmet’s top-rated editor, Ruth Riechl, and their famous test kitchen, and you will soon change the adjective element. Put simply: the name Gourmet will no longer mean what it used to mean.

They also overlooked the verb. Without the brand description, what is there to promote? Nothing but the name, now gutted.

It seems to me that this is an example of responding to a temporary change in the market economy (recession-based ad cuts) with a permanent change in marketing strategy …. Even if the shift in advertising is permanent, surely there are more options than just closing the door.

And remember, the management of any business is always easier when you keep marketing and branding in mind.